Café do Brasil: the Italian promise rising

Coffee in Italy is big business for many small roasting companies. There are about 700 roasting establishments in Italy, with a reported turnover last year of more than 2.6 billion Euros. Among these it is true, one, Lavazza, the world's largest espresso company claims 42% of this turnover and 47.6% share of the total domestic coffee market. Other famous large italian roasting companies include Segafredo Zanetti and illycaffé. These two in particular, and along with Lavazza, have strong presences in the farflung markets for Italian espresso. Competing with such a powerful names in coffee is not easy. This makes the enduring achievement of the Cafe do Brasil Group all the more interesting. Rising steadily from humble beginnings as a pastry shop coffee roaster in the heart of old Naples, it has managed over the past 50 years to gain position for one of its brands in second place on the national coffee retail market. This is Caffe Kimbo.

After Kimbo achieved prominence over the south of the peninsula, like all things of ambition in southern Italy, it moved northward. Starting 20 years ago this effort succeded with the help of an intense marketing punch--outdoor, print and TV. The brand gained also from word of mouth. It achieved something of a cult status from Rome to Milan. This for its tin packaging image, although brick packs were the main sales item, and too for appreciation of its unique taste. Kimbo popularized an "alternative" coffee taste, a Neopolitan styled espresso flavor for moka and espresso brewing.

The Caffe Kimbo taste remains key. It is a darker roast than what was common in the north. The blend too gave a consistent strength in taste and aroma that was refined, neither bitter nor coarse. It remains a distinctive coffee product in the range of Italian espressos. The company was started and is still managed and owned by the Rubino family. Michele Rubino is current president. Green coffee sourcing would obviously be of great concern to a blend brand that bases its reputation on the favor consumers give its drink. The Group includes a separate subsidiary, Interkom, for the careful sourcing of its blend, and as a green coffee buying company for national and international clients.

Emphasis on green coffee is matched by an especially strong focus on roasting and packaging technology. The Cafe do Brasil roasting plant near Naples extends to more than 40,000 sq. meters with all phases of production achieved inside a vacuumized space worked by automatic shifting of product and by robotic arms. Cafe do Brasil is further extending to include a new 20,000 sq. meter logistical center for packaged coffee distribution. This is located in the Interporto Nola area. Here, Cafe do Brasil has created the ultimate in current logistical technology to store and transport its production.

The Group has two key brands: Kimbo and Caffe Kose. Caffe Kimbo is positioned as a medium-to-upscale brand family with weight toward the upscale. Kose positions for the medium-to-discount sectors thus giving the company a product range to cover the market. In addition to its strength in retail sales, the Group has more recently targeted the Italian bar-cafe market. While strong in the Naples region, Kimbo had been locked out of many locations in Italy for HORECA. The hundreds of small and medium sized roasters in Italy thrive on their local and regional HORECA sales, making it difficult for even Lavazza to gain advantage. Recently, Kimbo bar-cafe products have been redesigned and extented for this sector with an eye particularly to its advantage in the upscale sector. For this, two new brand extensions are now available: Kimbo Espresso Bar and Kimbo Elite--the latter being the king of the mountain line. Kimbo and Kose products are also sourced and expanding into office-coffee service and the Italian vending markets. Relatively new product lines for the brands, such as pods and caps, are already yielding a strong return.

Cafe do Brasil pods and caps not only serve the office and vending arenas, they are also well distributed throughout the Italian retail market. Each product genre has its own home or office brewing machine. Released just months ago, the new capsule machine is named Caffe Kimbo Kapsula. The pod machine is unusual among major retailers in that it accepts a variety of pod brands in addition to its own. Cafe do Brasil pods and caps together hold 2.5% of the Italian retail coffee market. Specific to the total pod and cap market sector, Kimbo has 15.7% of sales. Kimbo is the number one brand in the pod and cap Italian market. Cafe do Brasil has 10.2% of the overall coffee retail business in Italy, landing it in second place as noted. Among its myriad brands, "Kimbo Espresso Napoletano" alone is taking 6.1% of the Italian espresso store market. Specific to the "moka" market, it is leader in the nation with 87.3% share.

In 2009 Group turnover neared 141 million Euros, up 9.8% from 2008. Breakdown in return is 90.1% for home use, 9.9% for out of home. Export turnover for the past year is reported as rising by 96% from that of 2008. Export sales returned 10% to Group turnover.

Important foreign markets for Cafe do Brasil products are France, Belgium, The Netherlands, Canada, Australia, the U.S., Greece, Germany, Romania and the Ukraine. The Group has built an important coffee roasting plant in Belgium. In support of a major initiative for the UK, the Group in March announced the purchase of the Metropolitan Coffee Company. Metropolitan is an important coffee distribution firm to the UK HORECA sector.

The dynamism of Cafe do Brasil is impressive. It seems to boil with new ideas and efforts. The degree of its success would elsewhere be phenomonal. In context, however, its excelerator to the floor mentality seems not so unique. Such energy and ethusiasm mirrors that driving a hundred smaller Italian coffee roasting companies. Italy remains the promised land for coffee.

Cimbali: An Italian Espresso Workshop

Italy is home to upwards of more than 30 companies making some kind of espresso bar equipment in the range of brewing machines and coffee grinders. These companies are located throughtout the country but tend to cluster in regions around Milan, Turin, Bolonga and Venice. About half of these firms are of a size to maintain presence in export markets, a vital attribute as the Italian bar sector for espresso equipment is mature, although smaller companies can thrive on replacement business in Italy and in playing out-soucing roles.

Among these companies there are four that together make up the majority of espresso brewing equipment manufacturers worldwide. Of these, the largest manufacturer of professional machines is Gruppo Cimbali combining, as it does, the lines of La Cimbali and Faema models. These of course are two stellar names in Italian espresso machinery to such an extent that the "La Cimbali" trademark alone has been found to have a significant recognition rating not only inside the industry but with consumers themselves.

Gruppo Cimbali, as with virtually all these Italian companies, is family owned and managed. Maurizio Cimbali, current Group president, is the fourth generation of the family to be directly involved with operations.What makes the largest companies important in the world of coffee is that they along with roasters Lavazza, Illy and Segafredo Zaneti have financial resources to introduce Italian espresso drinks globally. It remains an ongoing phenomenon of coffee business that sales are increasing in the international out-of-home coffee market due to the range of Italian style espresso beverages. This is so even in nations previously devoted to tea such as Korea, China and India.

Focusing on the Cimbali Group, size matters, as it has allowed the company to spin a far reaching web of foreign agents and owned subsidiaries giving it sales clout plus backup services. Size also gives the Group R&D potentcy unmatched elsewhere. The Group employs 40 R&D engineers and designers at headquarters in Binasco, a suburb of Milan. This is unique, and important to coffee in general.

The Group remains commited to fielding a product range that covers the markets, from semi-automatics to superautomatics, from the classic Italian espresso machine to those now for pods and caps. Innovation has built the La Cimbali-Faema house, and the out-ofhome sector has come to regularly expect new developments from these lines. This explains why R&D ranks high for the company. It takes pride in leading espresso to not only closely follow its beverage markets but preceed trends in the main line coffee beverage sectors, from slow to fast coffee.

Its focus on worldwide sales agencies and backup services is in the same way as that of the large automotive manufacturers. More importantly for espresso in general, the vast Gruppo Cimbali network are ears to the coffee service counter. This is so from a bar serving up hundreds of lattes and cappuccinos in Brooklyn to an old fashioned cafe in Malaga. The future of espresso is in what the customer wants and gets, not in how many units of any given model can be sold to a key account. Such strategy continues to suceed. Cimbali Group sells in 100 nations. Its sales/service network extends to 700 agreements plus seven subsidiary offices providing direct management of customer relations.

Consistent with its international development plans, in recent years Gruppo Cimbali has been opening and consolidating subsidiaries in France, Spain, the U.S. and the UK. Additionally, it is expanding its direct presence in Rome, Portugal and Germany. In Rome Gruppo Cimbali now operates from its newly open offices with its own personnel capable of orientering the customer in identifying the most suitable products to satisfy specific needs. More importantly, it is created to offer a service aimed at rapid and accurate resolution of after sales requests.

In Spain, the company operates through Gruppo Cimbali Iberica, resulting from the acquisition of Camponovo & Camara (Gruppo Cimbali's Portuguese distributor since 1954) and its integration with the existing Cimbali Group Spanish branch. Gruppo Cimbali Iberica allows the company to rely on a widespread presence on the Iberian peninsula, with offices in Lisbon, Oporto, Coimbra, Faro, Barcelona and Madrid.

In Germany, the group acquired the majority of shares of its distributor Esprotec. The existing distributors' network will continue to have a direct relationship with Group Cimbali in Binasco, while the new subsidiary will become the reference for national accounts and chains. The subsidiary has offices in Kempten, Ulm and Singen.

RuvecoTeck/Food Safety

Gruppo Cimbali has recently implemented a production process, called RuvecoTeck, which is said to drastically reduce the quantity of metal in the drinks delivered. With RuvecoTeck, the company hails a revolutionary innovation for the market. Cimbali perfected it in collaboration with a leader company of another sector and it is an exclusive Cimbali-Faema solution that is already NSF certified. From now on, all Cimbali Group components that come into contact with the water used for preparing drinks and steam will undergo this new treatment. Although only a few model lines have been involved in this change to date, production will be extending its application in the next few months to cover the entire product ranges of La Cimbali and Faema.

New Equipment

Only recently introduced, Gruppo Cimbali's new espresso machine pride is the M39 GT. The quality of the beverages made with the M39 GT is supported by Cimbali's new thermal technology.

The M39 GT's patented thermal system consists of a 10-liter boiler fitted with two heat exchangers operating in series, and independent stabilization chambers for each unit. Each chamber has a capacity of 400 cc and 800 Watt resistance. The designers have managed to combine the traditional Cimbali cartridge latest-generation stabilization chambers, maximizing the benefits of both solutions: power and precision. The water for the coffee is preheated in the exchangers, distributed evenly to the stabilization chambers and then heated to the set temperature. This, according to the company, is found to give optimum thermal stability and improve flexibility (from espresso to cafe creme), while allowing the temperature of each unit to be adjusted independently in seconds. M39 GT's 10-liter boiler, equipped with patented Smart Boiler software, offers a plentitude of steam to suit virtually any modern coffee service requirement. As well, M39 can feature a wireless connection with an instant grinder-doser. Using this type of connection, again patented by Cimbali, the machine and the grinder-doser communicate instantly and automatically to adjust the grinding and dose.

Another development from Gruppo Cimbali is the Q10. Smaller, sleeker this latest generation, super-automatic machine is designed for locations with a production rate of less than 100 beverages. Yet at the same time it ampifies its use by offering a menu of non-coffee drinks from solubles. Q10 features a new variable-chamber coffee brewing group for optimizing extraction of coffee and too of other drinks. It also features the MilkPS system, with a built-in gear pump so that espresso drinks based on frothed milk can be prepared at the touch of a button. The delivery spout is height-adjustable to allow the use of cups or glasses up to 18 cm high.

Over the past decade the rapid spread of espresso coffee consumption in the world has brought with it a great and growing number of HORECA establishments with lower average levels of espresso consumption. This huge entry-level segment of the espresso beverage market calls for simpler machines with more smaller-scale characteristics and performances. Most recently, the economic trend in the U.S. and the EU has further sped up this process.

Gruppo Cimbali sensitive to market signals makes its entrance into the entry level segment under the recently acquired brand Casadio. Casadio is a good fit to the Group as it too has a well known and reputed name in coffee bar equipment, especially for quality grinding parts and burrs. Here Gruppo Cimbali has invested significantly into the research of innovative solutions to achieve a cost to value ratio suitable for this market segment. The resources used in the development, the technical skills and the production capacity of the Group's Italian plants made it possible to industrialize a range of entirely new coffee machines and grinders.

Casadio presents two series of professional coffee machines for the entry-level segment, the Dieci and Venti. These are complemented by a complete range of grinders that include both entry level and on-demand solutions. Dieci and Venti differ in terms of heating systems. Both present novelties versus those already on the market. The two series are characterized by a modern and sleek design with particularly simplified maintenance procedures. They can also be personalized by modifying the push-button console and by creating logos and signatures. The complete range includes models with 1, 2 and 3 groups, semi-automatic and automatic, with standard height and coffee to go for tall glasses.

In the mid 1990s a spokesman for one of the world's biggest coffee roasting companies predicted the demise of most companies in the Italian bar-espresso equipment industry. He predicted that only three or four companies would be able to survive.

That this has not happened, although there has been some consolidation and the Great Recession of our time has claimed a few victims, is a tribute to what he did not consider. The unique genius of Italian crafters, of their workshops, of dreading nothing more than the lack of a new idea. Espresso equipment began in the great tradition of this, in numerous workshops throughout Italy. Somehow it has kept this character. This explains why so many remain and provide.

Perhaps what the fellow from the big coffee company would say now is that espresso machinery sales for home, office and HORECA are too large and varied on planet Earth; all these Italian companies can and do find their places. But the big three or four must exist, thus to spend--for opening and developing new markets, for investing richly as Gruppo Cimbali does, in the future of coffee.